Vinyl records are making more money than ad-supported streaming

Streaming music seems to be the all the rage for music media. But the numbers tell a different story. Vinyl is making more money than the digital competition.

Vinyl record sales brought in $221.8 million in revenue between January and June 2015, a 52 percent year-over-year increase, according to the Record Industry Association of America (RIAA). Ad-supported streaming services brought in $162.7 million during that same time period, according to the September 2015 report “News and Notes on 2015 Mid-Year RIAA Shipment and Revenue Statistics.”

Record labels are responding to this growing market by releasing both new and back catalog music on vinyl. Younger audiences who have never tried a turntable before crave the sound vinyl delivers.

“It’s a market that’s flooded right now because all of these record companies have realized that the only way for them to make money is to sell records,” said Scott Schaaf, owner of Pinwheel Records in Pilsen. “They are not making a ton of money from streaming on Spotify. The artists are certainly not making very much money with Spotify.”

So vinyl has morphed from the collector’s market in vintage records to new releases that provide a digital download with the classic vinyl record.

And about the sound. Vinyl enthusiasts argue that vinyl sounds better than digital music, which is compressed into small files that can alter the tones.

“You will hear different things. You can play [a song] on Spotify, and then we can play that same song on a vinyl record, and it will sound completely different, ” said Andrew Mitchell, co-owner of 606 Records in Pilsen. “I feel like the digital sounds manufactured and has piercing sound to it.”

You can hear organic tones on vinyl that you also would not hear on a digital file.

“For my ears it does [sound better than a download]. There is kind of a saying that analog is ‘warmer’,” said Schaaf. “I think there is something kind of romantic, you can hear that pop sometimes, especially in an older record, and even with those pops a lot of time it still sounds better to me than an mp3.”

People also like the activity of putting on a record on a turntable. This is completely different than the quick “click and play” that comes with digital music.

“I like touching it. I like the ritual of putting it on the record player and playing it.” said David Sanchez, a junior interactive art director from Pilsen.

“I like to think we are selling an experience,” Schaaf said. “It is an experience when you pull it out of the sleeve and put it on your turntable, hit play and listen to it. It is an activity. It is fun.”

The physical appeal of vinyl is not limited to the record. Many people also prefer buying vinyl records in the store, even though they are readily available online.

“I try to buy them in a store because I think record stores are important. There is something about browsing through records, the smell of it, and everything else. The visceral and tactile feel of being in a record store is different than being online,” said gymnastics coach Charley Nelson, who was shopping at Pinwheel Records.

One reason people enjoy shopping in store is because of the hunt to find a particular title, especially in the world of vintage vinyl.

“We have a lot of folks that come in that are hard core collectors. They know exactly what records they are looking for, which versions,” Schaaf said. “I have had people who’ve told me that it is just not as satisfying to just make a couple of mouse clicks and having something delivered to your door. It’s the hunt that is exciting for them too.”

Another reason that people enjoy shopping for records is the opportunity for discovering new music.

“I think you are going to find stuff in the store that you would never know about, like when you go to a record store you can find stuff that you wouldn’t necessarily find on your own. That is why record stores are great because people working there know a lot of music and they can show you stuff that you don’t know,” said college student Alejandro Zerah, who was shopping at Pinwheel Records.

The social aspect of going to a record store is also appealing to consumers.

“It is definitely a community vibe,” said Dave Hofer, a buyer at Reckless Records in Wicker Park. He describes record stores as a “great meeting place.”

For used records, prices vary dramatically based on their condition and their rarity. On average, new records cost $10-25, according to Schaaf.

According to the Nielsen 2015 Mid-Year Report, the top selling vinyl records includes both new and old releases. The top selling vinyl title for is Taylor Swift’s “1989,”with other new records like Sam Smith’s “In The Lonely Hour” and Alabama Shakes’s “Sound and Color” making the top 10 list. Top selling record vintage records include Pink Floyd’s “Dark Side of The Moon” and Miles Davis’s “Kind of Blue.”

Records store sales at Chicago area stores follow a similar trend. Newer records like Swift’s “1989” and the latest album “Star Wars” from the Chicago band Wilco sell well. Older records, like Prince’s “Purple Rain,” Fleetwood Mac’s “Rumors,” ACDC ‘s “Back in Black,” and Paul Simon’s “Graceland” always sell well when they are in stock. Schaaf said classic rock, from The Beatles, Led Zepplin and the Rolling Stones, are always in demand.

Popular records at Reckless Records also include “1989” and anything from The Beatles. Also, records by rap duo Run the Jewels are popular, according to Hofer.

“When people buy new albums, they tend to come with downloads of the album,” Schaaf said. “So not only can you listen on your turntable at home, you can put them on your iPhone, your phone, listen to it on the train or listen to it in your car.”